Front Desk Collections

By Chandresh Shah

As you know, I have been focusing on a high-level financial analysis of your practice.

Part of this analysis involves looking into your collections and related gross collection percentages. However, collections do not always meet expectations and there are a few possible reasons you should look for:

1. Shift in your payer mix (click here for last week’s article)

2. Decline in reimbursement rates

3. Poor follow-up on unpaid insurance receivables (Insurance A/R)

4. Poor front desk collections

5. Poor claim filings

6. Not sending out patient statements

7. Poor patient receivables management (Patient A/R)

8. Possible embezzlement

This week I will be focusing on the fourth reason : Poor front desk collections.

For certain medical practices, a payment at the time of service policy should be in place. If patients do not make payments at the time of their office visit, insurance has to be filed for these services and consequently, the office must wait for its payment.

As a result, collections will fluctuate and the related gross collection percentages will not be as good as they could have been if these payments were secured at the time of the visit.

An explanation of benefits (EOB) review is very important. Staff members must be educated on this as local collection percentages can be a direct result of not filing clean claims.

Patient Centered Front Desk Collections

Customer service, or Patient service in Medical Practices is gathering more prominence however this focus can create a sense of confusion among practice owners and providers.

Consider this all too common scenario:

You fail to collect copay and/or outstanding balances at front desk.

Patient receives a bill which is generally delayed because you wait for the insurance to pay their part first. By this time, patient has forgotten about the visit.

When they get the bill after a month or two, they are surprised for two reasons. One, they did not think they owed anything and second, the staff did not mention that they would get a bill after some time – or better, provide some kind of estimate.

This means the patient did not ‘budget’ for this and spent money elsewhere.

This leads to frustration – they may call their health plan which generally does not help. This leads to frustration. They take it out on – you guessed it, your practice – the front desk person, the biller and sometimes, even the provider.

This scenario is a result of what I believe is a wrong idea of Patient Centered Service. This confusion can arise if the following questions are not being addressed within the practice:

  • Does Patient Centered service mean not focusing on patient collections?
  • Will patients be unhappy with you?
  • Will you lose patients if you ask for outstanding balance?

As a response to that, data gathered has shown the exact opposite – Engaging patients in meaningful financial conversation actually creates a positive image of your practice and it’s patient service.

I know you work very hard to take care of your patients and in fact, coach your staff to do the same. Somehow, conversation related to money is left out and avoided at all costs. Everyone feels it inappropriate to talk about money when a patient is in pain. Ironically, if you don’t engage in a comprehensive conversation with patient that includes financial terms, this can portray the wrong image about your practice. Practices that engage in a holistic approach of 360 degrees conversation including money shows that you actually care about the overall well-being of a patient.

We all hate dealing with uncertainty. Spending a little time talking to patients about money goes a long way in patient satisfaction and in the process, keeping your patient aging or patient account receivables low.

Summary

In summary, you should train and make sure front desk is proactive in engaging and alerting patients about statements, their financial responsibility and even educate them a bit about how their insurance plan works if possible. This is one of the best service you can do for them to maintain a healthy relationship.

Unpaid insurance receivables (A/R): What causes them, how to address them and what following up can do

By Chandresh Shah

As you know, I have been focusing on a high-level financial analysis of your practice.

Part of this analysis involves looking into your collections and related gross collection percentages. However, collections do not always meet expectations and there are a few possible reasons you should look for:

1. Shift in your payer mix (click here for last week’s article)

2. Decline in reimbursement rates

3. Poor follow-up on unpaid insurance receivables (Insurance A/R)

4. Poor front desk collections

5. Poor claim filings

6. Not sending out patient statements

7. Poor patient receivables management (Patient A/R)

8. Possible embezzlement

This week I will be focusing on the third reason : Poor follow-up on unpaid insurance receivables.

The most common problem practices face when filing claims to insurance companies are payers who may try to delay payment or an error made by the office resulting in a rejected or delayed payment. Though practices have little control on payers, rejected or delayed payments can be resolved by follow ups.

However, follow ups do not just mean “following up, for the sake of it” as follow ups should be timely. Timely follow-up is something that everyone knows should be done. Providers, Office Managers and billers all know this. Yet, a breakdown in practice workflow is extremely common and is overlooked. It is easy to blame systems and technology than internal personnel and processes. The end result of course is that it negatively affects cashflow.

It will be helpful to keep in mind that the average time for receiving payments must be 45 days from date-of-service; not date-of-filing. Submitting claims to insurance companies is the easiest part of billing. The bigger problem is securing payment. Knowing what the holdup is may be half your battle. Yet, many practices, for various reasons don’t file claims in a timely manner. Claims must be filed the same day as the date of service.

Delay in managing this process and delay in payments from insurance companies affects monthly collections. The resulting fluctuations affects cash management and therefore owners and providers may have to dip into their personal reserves.

The overall objective is always to have a consistent cash flow from month to month. The biggest enemy of any business is unpredictability.

How to work your outstanding claims and denials?

Knowing why claims are not paid is the first step. Here are some of the most common reasons why claims may be unpaid/rejected/denied.

  1. Wrong information: Get the correct information from the insured patient. People sometimes forget that Billing really starts at the Front desk. Diligence in recording the correct patient demographics and verifying the insurance for every patient at every visit is the most critical task that a practice should do.
  2. Insurance Eligibility and Insurance coordination of benefits: Know which insurance is primary and how much the secondary insurance will pay, as per coordination of benefits. Front desk must ask patients and verify the details. Billers must know this before filing a claim.
  3. Depending on your location, insurance participation and specialty, you may be required to get a referral. Failure to do so will result in non-payment. Here too, the front desk staff plays a critical role.
  4. Missing authorization number for procedures – in-office as well as services performed at a hospital. There are ways to follow-up if a claim was rejected. If there is no authorization number on file and the insurance company requires it to pay the claim, you can submit an appeal letter with medical notes. If the insurance company denies the claim for no authorization, you cannot bill the patient; you have no choice but to write off the claim as a loss, even if you followed up on time. That is why all work upfront is important.
  5. Claim was submitted to the wrong insurance company: Expedient follow up can correct this error.
  6. Incorrect ICD-10 or CPT® code: Incorrect coding usually happens because diagnosis and procedure codes change every year in October, after ICD-10, HCPCS Level II, and CPT® code books are released for the following year. Make sure your billing system is updated with latest codes.
  7. Other: There are lots of other reasons for denials, including: invalid patient name, invalid subscriber number, wrong date of birth, wrong date of service, wrong place of service code, etc.

Following up Process-Back to Basics

If a practice has in-house biller, make sure that person is dedicated and the task of follow up is the most important – which takes precedence over any other task.

It can be difficult to follow up on claims on a regular basis, if that person is dealing with many other roles. Practices make the mistake of dumping too much work on critical employees and ask them to multi-task. This can and will take a toll on payment follow-up.

Thorough and regular follow-up on unpaid claims will result in fewer losses and more revenue.

Financial Analysis: Shift in Payer Mix

By Chandresh Shah

In the next few newsletters, I will be focusing on a high-level financial analysis of your practice.

Part of this analysis involves looking into your collections and related gross collection percentages. However, collections do not always meet expectations and there are a few possible reasons you should look for:

1. Shift in your payer mix

2. Decline in reimbursement rates

3. Poor follow-up on unpaid insurance receivables (Insurance A/R)

4. Poor front desk collections

5. Poor claim filings

6. Not sending out patient statements

7. Poor patient receivables management (Patient A/R)

8. Possible embezzlement

This week I will be focusing on the first of the possible reasons.

Shift in your payer mix

Health plan penetration can change suddenly, depending on your geographical location and service area. The current state of healthcare in our country along with many unknown variables means health plans can change from commercial insurance to managed care. Within a short period of time of less than a year, your mix of 20% managed care penetration can change to 70% as an example.

Managed care plans usually pay less because the contracted fee tends to be lower than your offices normal fee schedule. Therefore, if managed care percentage of your payer mix arises your gross collection percentage should decline accordingly.

What can happen if you fail to analyze the shift

Many offices do not analyze their financials and therefore fail to identify such a shift in payer mix until it is too late to do anything about it. Not only that, people in your geographical location can change health plans more frequently than ever before which can have a direct financial impact on your practice.

Take action- analyze

If you suspect a shift in payer mix, the first thing you should do is to get a detailed breakdown of the current payer mix. Compare that with last year. Determine what percentage of the revenue is being derived from managed care, commercial insurance, self-paying patients, Medicare, Medicaid, and other insurance programs.

Once you have all this information, find out and determine how you can shift your mix of patients to the type of patients for whom reimbursement is the highest.

How do you do this? You can come up with marketing strategies to target specific payer class. Of course, if your entire geographical area has moved towards managed care you probably don’t have much leeway. In this case you may be stuck with a reduced managed care reimbursement because there may not be other alternatives.

In any case, an analysis of payer mix will certainly let you know if that is the reason for your lower collections, and if there is anything you can possibly do about it.

Decline in Reimbursement Rates

By Chandresh Shah

As you know, I have been focusing on a high-level financial analysis of your practice.

Part of this analysis involves looking into your collections and related gross collection percentages. However, collections do not always meet expectations and there are a few possible reasons you should look for:

  1. Shift in your payer mix (click here for last week’s article)
  2. Decline in reimbursement rates
  3. Poor follow-up on unpaid insurance receivables (Insurance A/R)
  4. Poor front desk collections
  5. Poor claim filings
  6. Not sending out patient statements
  7. Poor patient receivables management (Patient A/R)
  8. Possible embezzlement

This week I will be focusing on the second reason : Decline in Reimbursement Rates.

Many insurance companies are changing the way they pay physicians. This is a very disturbing trend.

Physicians are receiving less for their services than they were before. Many commercial insurance carriers and managed care plans are adopting Medicare’s resource-based relative value scale system as a way to pay their position providers.

Then they select conversion factors that will place the new reimbursement rate structure as a percentage of the current Medicare fee schedule.

In many cases, this switch can cause up to 40% decline in surgical reimbursement rates in that service area. Some payers in some areas of the country are even paying contracted rates less than the Medicare’s rates.

As payers reduce what they pay physicians, you can expect decline in both the practices overall collections and related gross collection percentages over time. According to some reports 65% of physicians see declining reimbursement rates as the top issue negatively affecting practice profitability.

Unfortunately, many doctors who maintain independent practices are forced to change their business model. For example, reimbursement and other cost pressures have forced 26% of physicians to stop accepting Medicaid while 22% have reduced office support staff.

But it does not have to be this way.

What can / should you do about it?

There are many ways to effectively counter these reductions. While there isn’t much you can do to stop reimbursements cuts, a proactive approach will help you offset the negative effects of declining reimbursement rates.

Increase Your Patient Base

When margins decrease, increase volume. Decreased reimbursement means per claim revenue drops. To make up for this, you need to see more patients.

Finding patients to treat shouldn’t be a problem. Number of patients joining the healthcare system has been increasing.

Making use of good tools (healthcare IT systems) coupled with optimized workflow will help you take on the upcoming patient influx without having to add more staff. Find systems and tools that focus on workflow efficiency rather than fancy features.

Consider Outsourcing Medical Billing

Outsourcing billing can make up for declining reimbursement rates by bringing in higher net collections after cost. According to a report from Software Advice, outsourced billing can bring in $1,496,000 after cost for a typical three-physician practice, compared to only $1,241,800 for in-house billing.

The savings of outsourced billing come primarily from a decrease in staff costs plus the ability to bypass purchasing billing and collections software/hardware.

Reduce Claims Denials

You must battle declining reimbursement rates by reducing claims denials as much as possible. On average, denials cost practices $25 to $30 each. There are a couple routes you can choose for reducing claims denials.

Reduce rejections and denials through patient eligibility checks and code reviews. This is the speedier and more effective route to correct claims.

The other is to be meticulous when submitting manual claims. There are plenty of opportunities for your billers to make costly mistakes. It can be something simple like misspelling a patient’s name or something more complex like misusing CPT modifiers.

Maximize Your Tax Deductions

This sounds fundamental and basic. But my CPA says many Physicians don’t pay much attention to Tax-deductible expenses which are identified as almost any purchase that helps with operating a business.

Maximizing deductions can be a balancing act. For example, offering disproportionate benefits to your employees may reduce taxes, but may also be outweighed by the extra costs of benefits. Striking the right balance can mean an increase in revenue for your practice.

In summary

Being proactive about overcoming declining reimbursements is essential for the success of your practice. Remember, inflation didn’t suddenly go down along with reimbursement rates. The problem will only get worse if not confronted right away.

Greenway Health Fined by DOJ – what does it mean?

By Chandresh Shah

DOJ fines Greenway $57 million

I was planning to do part 2 of the financial analysis articles series that I started last week. I’m going to interrupt that because of a very serious news that I saw today, and you may have seen it too.

This concerns the EHR giant Greenway Health. Click here to see the article.

There are 2 major reasons for which Department of Justice has fined Greenway $57 million.

1. False EHR certification claims. Neglecting to fix the problems.

2. Paying customers kickbacks for recommending its products to others.

It is not the first time that this is happened. The first culprit was eClinicalWorks.  In 2017, eClinicalWorks agreed to pay hundred and $155 million to settle allegations.

The obvious implication of this is that providers and physicians no longer know who to trust and who not. Physicians are not experts in technology. Common reasoning would lead you to believe that it would be safer to go with the product of a larger company. On the flipside, some smaller companies were acquired by larger companies and have deactivated products of these companies.

My suggestion is to stick with relatively smaller companies, not startups, that have been around for at least 10 years. Companies must have sound management and financial strength. That really is the best you can do and hope that it all works out in the end.

I’m glad to be associated with an organization that I have known for 10 years.  10 years is enough time to figure out if this is a genuine company or not, especially if your intimately involved with the decision-making process and day-to-day operations with the staff.

Although these news are scary, I am still optimistic of the future of healthcare information technology.

Insight into High-Performing Teams

By Chandresh Shah

I was speaking with an experienced executive coach Uri Galimidi yesterday and he pointed me to one of his blog articles. As I read the article HOW GOOGLE CREATES HIGH-PERFORMING TEAMS, I realized how relevant it was in businesses of all sizes including medical practices: solo as well as large groups.

When we go to conferences and pick up new ideas to implement, we want to implement them in our practices. We feel positive they would work, yet sometimes we are confronted with failure. We change technology such as EHR systems and practice management systems. After going through an extensive evaluation, you come to the conclusion that what you choose is perfect for your practice. Yet many practices quickly realize that it did not work out.

I’m sure everyone has either gone through this themselves, or have heard stories of colleagues who have gone through this. I have personally encountered this so often that it is not even funny.

As I read the article I realized the real reason why things do not work out. The article talks about high-performing teams, which lead to successful project implementation. It has nothing to do with the IQ of people, their personality types, education, social backgrounds and so on. The article talks about various factors but I want to focus on the first one.

Psychological safety

This is been found to be the most important prerequisite for success in projects and personnel performance. It is really about ‘creating an environment in which all team members know that they can express their thoughts and ideas, and that they will all be heard – irrespective of their standing in the team’s dynamics. They know that they will not be “shushed down” or belittled for expressing even the most off-the-wall idea. They know that it is safe for any member of the team to talk about the “Elephant In The Room” without fear of retribution.’

Let us take the example of selecting and implementing EHR systems.

As the author talks in the initial part of the article about a crucial mission-critical project at Google, he talked about meeting with the employees. It was a detailed meeting asking employees about their opinions whether they are ready to go live or not. In addition, they were asked to write down top 3 risks or issues that may negatively affect the successful go live. Everybody said yes, yet there was one person who was scared and went along by saying yes but decided to speak to him in private about his assessment due to fear of his ideas being shut down publicly. As it turns out, the risk factor that this person identified was crucial to the success of the project.

Identifying and creating an environment of psychological safety along with trust and dependability are so important that I cannot stress that enough. If these parameters exist, in the environment of genuine trust and openness, the team will not only be able to identify risks but more importantly come up with solutions to overcome them in order to make any project successful.

Finally, as the article says, ‘although these concepts may sound trivial, they do require a conscious awareness and an investment in time and energy on the part of the team leader to create an environment in which her/his team will perform at the highest level possible. Turning these concepts from common sense to common practice will produce handsome dividends.’

BEST WAY TO EVALUATE ANY PRODUCT – ASK – “AND THEN WHAT HAPPENS?”

Seth Godin’s blog below got me thinking. This is how we should evaluate software and technology products.

A simple dialog can turn opinions into plans (or perhaps, into less tightly held opinions).

We ask, “and then what happens?”

Flesh it out. Tell us step by step. The more detail the better.

No miracles allowed. And it helps if each step is a step that’s worked before, somewhere and sometime else. The other question that helps with this is, “has that step ever worked before?”

We don’t have a shortage of loud and strongly held points of view about business, culture, or technology. But it may be that finding the time to draw a map helps us get to where we want to go (or to realize that we need a new map). 

What does all this have to do with Product/Software Evaluation?

When doctors buy EMR software, majority of them make the mistake of doing an improper evaluation and testing before buying. This leads to dissatisfaction and practice inefficiencies. Medical clinics have a lot of moving parts and workflows. Doctors will evaluate from the clinical perspective. Office managers and billing staff evaluate the systems from their own workflow point of view.

Where it gets complicated is that they focus on inefficiencies and dissatisfaction with their previous software. They assume that other parts of the system work fine. The evaluation needs to happen as if you are buying a system for the first time.

Every step of the process must be evaluated independently.

DO YOUR HOMEWORK.

This requires a lot of homework. Start by documenting every step of the process. This is more difficult than it sounds, because you have been doing things for a long time and you take things for granted. You don’t do not feel the necessity to document simple steps. Once all the steps and workflow have been documented, this is where you need to ask the vendor, ‘then what happens?’ Keep on asking this question until you know the exact steps that you have to take in that software to do your job – everyone’s job.

There is another side benefit of doing this. It will prevent future finger-pointing. In majority of the cases many unspoken things lead to discontent. How many times have I heard, “I thought you said…”, Or, … “You never told me this…”

Do yourself a favor, and keep on asking “and then what happens?”. Spend as much time as necessary with the vendor evaluating the product.

EHR – Hope & Reality

Seth Godin wrote very well about Hope and Reality in our lives. “Sometimes, we don’t sell what we’ve got, we sell what could be.”

He gives the example of Bruce Springsteen’s autobiography. just the proposal can sell for $10 million, not the finished book. Why? It is what can be.

That’s how the Stock Market works.

That is how EHR companies sell. Hope. That is what Doctors buy – Hope.

Hope is not necessarily a bad thing if it is combined with due diligence and trust. The problem is not many providers and medical practices have experience in conducting proper due diligence of EHR systems. I have written about this in the past. Prepare instead of hoping.

The only way to get maximum out of an EHR demonstrations is preparation. I have seen too many demonstrations where they are all over the place. You must know what you want. Write it down. Here is a simple guideline.

1. Write your current workflow. Office workflow, from patient calling for appt, check-in to check-out. List your staff, write down who does what and in what order.

2. Identify ‘gaps’ or ‘areas of improvement’ in your workflow map.

3. Potential pitfalls and fears in implementing technology.

Now, Prepare a Demonstration Script.

1. Take your most common encounter / patient visit. Look at a few finished visit notes.

2. De-identify the set of note(s) so that patient information is removed.

3. Send it to the demo person(s) – at the time of demo, or just before so that they have enough time to review it, but not enough to ‘fudge’ their system. Also send them or tell them your workflow.

4. Ask them to stick to the script. Only after that is done, they can show off their system with other ‘features’. But tell them what you care about and what you don’t.

5. Finally, ask them – ‘What would you do to improve my workflow and make my practice more efficient’? This is one of the most important questions, don’t skip it. It will tell you a lot about how this vendor approaches things.

Proper preparation converts hoping to reality

FREE Data conversion from EHR system

Free data conversion from your current EHR and Practice Management system!

— ANY EHR Vendor

As a Provider or Practice manager, what do you think when you read this sentence?

  1. ‘This vendor will extract the data from my existing system AND import into the new system – for free.’
  2. ‘This vendor will just import the data into the new system – for free. This means it is still my responsibility to get data from the old system.’

Let me know – 1 or 2?

Is Practice Fusion the next victim?Why should you care?

“Not good enough to pay for,” a physician client told me in a recent conversation regarding Practice Fusion. The old cliché, “You get what you pay for,” is true after all!

I have been talking with a lot of practices and physicians who use Practice Fusion as their electronic medical records system. After the recent announcement Practice Fusion is being acquired by Allscripts, clients received notifications Practice Fusion will no longer be free.

From the practice and physicians’ perspective, the main and perhaps only attraction of Practice Fusion was that it was a free system. For most practices, it served its purpose, allowing them to be compliant with meaningful use and even receive incentive money.

The question is, if this system worked for doctors in the past, why are they looking to switch? After all, they are used to the system, and change is never easy. I’m not saying everybody will switch, but I suspect a majority of practices have started looking for cheaper or more stable alternatives.

The Acquiring Company Is Allscripts;
What Does That Mean for the Future of Practice Fusion?

Look at the history of Allscripts with respect to acquisitions. Their journey started with a merger with Misys in 2008. Since then, they have had a number of acquisitions including Myway, Eclipsys, Medinotes, DB motion, Jardogs, etc.

In most cases, these products have eventually withered away. Allscripts tried to move their customers onto their main platform of choice. Practices suffered.

Allscripts’ most recent acquisition before Practice Fusion was McKesson. With all these islands of technology and Allscripts’ trying to achieve economies of scale, it is nearly impossible to maintain and keep them all alive and thriving at the same time.

At one point, Practice Fusion was the darling of the industry. So many investors got in, it was worth $1.5 billion. In the end, Allscripts got the company for a measly $100 million. That should tell any provider remotely considering sticking with Practice Fusion that it is time to abandon the sinking system.

I can see the writing on the wall—or my blog just a few short years from today—Allscripts is sunsetting Practice Fusion and doctors won’t be riding into the sunset with it.